Playing by the Rules: A Handbook for CDBG ... - City of El Cajon

More documents

Recommendations

Info

Playing by the Rules A Handbook for CDBG Subrecipients on Administrative Systems CHAPTER 2.0: FINANCIAL MANAGEMENT When subrecipients first begin providing services under the CDBG program and drawing down funds, few have financial systems in place that meet all pertinent Federal requirements. For many of you, putting together a financial system both that serves your needs and meets Federal requirements may have been a matter of trial and error. This kind of “ad hoc” approach is dangerous, however, because you may not find out about the inadequacies of your system until it is too late, such as when you run into a major problem with an overspent budget or a serious audit finding. This chapter provides you with a summary of the required elements of financial systems for managing Federal funds. Before you plunge into the details of the Federal requirements, you may want to ask yourself the following eight sets of questions to find out if there are particular areas where you may need help. 1) Internal controls: Does your agency have a written set of policies and procedures that define staff qualifications and duties, lines of authority, separation of functions, and access to assets and sensitive documents Does your agency have written accounting procedures for approving and recording transactions Are financial records periodically compared to actual assets and liabilities to check for completeness and accuracy 2) Accounting records: Does your agency maintain an adequate financial accounting system, the basic elements of which should include: (a) a chart of accounts, (b) a general ledger, (c) a cash receipts journal, (d) a cash disbursements journal, (e) a payroll journal, (f) payable and receivable ledgers, and (g) job cost journals (if involved in construction) Does your accounting system provide reliable, complete, and up-to-date information about sources and uses of all funds Are “trial balances” performed on a regular basis (at least quarterly) 3) Allowable costs: Does your agency have a clearly defined set of standards and procedures for determining the reasonableness, allowability, and allocability of costs incurred that’s consistent with the basic Federal rules (OMB Circulars A-87 or A-122) Does your agency know which specific types of expenditures are prohibited under the CDBG program Does your agency have an approved indirect cost allocation plan Chapter 2–1
Playing by the Rules A Handbook for CDBG Subrecipients on Administrative Systems 4) Source documentation: Does your agency maintain up-to-date files of original source documentation (receipts, invoices, canceled checks, etc.) for all of your financial transactions, including those involving obligations incurred and the use of CDBG program income 5) Budget controls: Does your agency maintain an up-to-date (approved) budget for all funded activities, and perform a comparison of that budget with actual expenditures for each budget category Does your agency regularly compare progress toward the achievement of goals with the rate of expenditure of program funds 6) Cash management: Does your agency have a regular procedure for accurately projecting the cash needs of the organization that will serve to minimize the time between the receipt of funds from the grantee and their actual disbursement Can your agency ensure that all CDBG program income is used for permitted activities, and that such program income is used before further drawdowns are made from the grantee for the same activity 7) Financial reporting: Is your agency able to provide accurate, current, and complete disclosure of the financial results of each Federally-sponsored project or program in accordance with the reporting requirements of the grantee and HUD 8) Audits: When was your last Independent Public Accountant (IPA) audit and what were the results Does your agency have a copy of the management letter If your answer is “yes” to all of these questions, then your agency has established a laudable degree of control over its financial affairs. If you were not able to give an affirmative answer to all of the questions in the preceding section, then this chapter will help you to understand the minimum Federal requirements for financial management and to identify where your systems need strengthening. Once these areas have been identified, you can work with your financial staff, your auditor and/or your grantee to develop the systems and expertise you need to gain control of your agency’s financial affairs and meet the Federal requirements. Chapter 2–2
Page 1 and 2: U.S. DEPARTMENT OF HOUSING AND URBA
Page 3 and 4: Playing by the Rules A Handbook for
Page 15: Playing by the Rules A Handbook for
Page 67 and 68:
Playing by the Rules A Handbook for
Page 69 and 70:
Page 71 and 72:
Page 73 and 74:
Page 75 and 76:
Page 77 and 78:
Page 79 and 80:
Page 81 and 82:
Page 83 and 84:
Page 85 and 86:
Page 87 and 88:
Page 89 and 90:
Page 91 and 92:
Page 93 and 94:
Page 95 and 96:
Page 97 and 98:
Page 99 and 100:
Page 101 and 102:
Page 103 and 104:
Page 105 and 106:
Page 107 and 108:
Page 109 and 110:
Page 111 and 112:
show all

Playing by the Rules: A Handbook for CDBG ... - City of El Cajon

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?